The MLA was passed in 2006 with bipartisan support to offer vital consumer protections to active duty military service members against predatory lenders. Payday lenders often base their storefronts near military bases to catch service members in loans with outrageously high interest rates that lead to a cycle of debt. The MLA caps the annual interest rate to service members and their dependents at 36%.

The Stop The Debt Trap campaign lauded the letter and the effort of Senators to defend the service members and their protections:

“We commend Senator Reed and his fellow senators for their leadership in protecting service members from abusive predatory lenders. Financial distress continues to be a leading factor that contributes to a lack of combat readiness and family stability for our men and women in uniform,” said José Alcoff, payday campaign manager at Americans for Financial Reform. “Families and service members rely on the Consumer Bureau to ensure lenders comply with the law, and are caught if they target service members with debt trap loans.”

“Given the opportunity, predatory lenders will target military servicemembers and pull them into horrific debt traps. The bipartisan Military Lending Act has helped put an end to these shameful practices. We applaud these senators for calling on the CFPB to fulfill its obligation of stopping loan sharks from preying upon servicemembers and their families,” said Scott Astrada, Federal Advocacy Director at the Center for Responsible Lending.